Democrats Sue FEC over McCain Finances

The Democratic National Committee has sued the Federal Election Commission, saying the commission failed in its obligation to investigate John McCain's (R-AZ) campaign finances. It's another consequence of the FEC being nonfunctional in the midst of the biggest fundraising season in history — unable to act because it lacks the necessary number of commissioners.

The Democrats' lawsuit has a couple of angles to it. One is legal and technical. The other is political: The Democrats want to remind voters of questions about McCain's campaign finance troubles, while Sen. Hillary Clinton (D-NY) and Barack Obama (D-IL) go on wrangling over the Democratic nomination.

"I think this lawsuit is in large part designed to try to keep this issue before the public," says Tony Corrado, a political scientist at Colby College and a specialist in campaign finance law. "The Democrats are trying to keep the pressure on John McCain because they want to keep making the case that he has somehow violated the law."

Commission Nominees in Limbo

Here's the legal part of the case: Democrats say McCain has violated campaign finance law and that he's getting away with it because the enforcement agency, the FEC, has not been able to function. The panel needs four commissioners to make decisions, but it only has two, thanks to a standoff between Senate Democrats and the White House over confirmation of three nominees.

McCain's lawyers say his alleged violation is no violation at all. When McCain's campaign was about to go broke over the winter, he got a line of credit from a bank. He had already applied for public financing. But when his fundraising improved, McCain declared that he was withdrawing from the public financing program.

The DNC lawsuit says he can't do that — because he had already made financial use of his access to public funds. The Democrats point out that McCain's campaign manager guaranteed to the bank that McCain could qualify for public money in the future.

"We think any fair and objective look at the facts would show that no bank at arm's length would make a loan to the McCain campaign in the situation it was in, unless they knew that if push came to shove, they could rely on getting the taxpayer money to help repay the loan," says Joseph Sandler, the DNC's general counsel.

Agency Unable to Enforce Law

If McCain is still in the public financing program, he has not received a dime from it yet — but at the same time, he has broken the spending cap that goes along with the public money.

"It's the first time that a presidential candidate is violating the law, arguably every day, by breaking the spending limit," Sandler says. "The agency charged with enforcing the law is unable to do anything about it."

This is not the first time the Democrats have taken notice of the situation. The DNC filed a complaint about it in February. Under federal election law, it can sue the commission for failing to act. The DNC argues in its suit that the commission's inability to act is the legal equivalent of failing to act.

The Republican National Committee called the suit "total nonsense" concocted by "trial-lawyer Democrats."

Bad Sign for the FEC

Meanwhile, as if to emphasize the plight of the FEC, former chairman Robert Lenhard has asked that the White House withdraw his name from nomination to one of the empty seats on the commission. While he was waiting to be confirmed, he was hired by one of Washington's top law firms.

Corrado says that's a bad sign for the commission.

"Not only do we have a dysfunctional FEC at this point, but it is going to be increasingly difficult to find individuals who are going to be willing serve on the commission," he says.

Lenhard, a Democrat, had already served two years as a recess appointee without Senate approval. His nomination and two others' have been pending in the Senate since December 2005.

FEC watchers say that if the stalemate isn't broken before the Senate's July recess, the commission will effectively be out of business for the rest of this election year.



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